Two Defense Verdicts Upheld On Appeal for Insurer - Reformation of Policy Not Allowed and Costs Under 998 Awarded to Insurer

December 1, 2006

Murchison & Cumming, through the efforts of Edmund G. Farrell, III and Bryan M. Weiss, recently won two separate insurance coverage appeals on behalf of Century Surety Company.

Plaintiff claimed to be an additional insured under the Century Surety insurance policy. However, due to a clerical error unknown to Century Surety, the wrong entity was named on the additional insured endorsement. Plaintiff sought to have the policy reformed so as to name the correct entity as an additional insured. The trial court ruled in favor of Century Surety, denying Plaintiff's claim, and the Court of Appeal affirmed the decision.

Plaintiff filed a second appeal based on the trial court's award of costs to Century Surety following the judgment in its favor. Century Surety made a CCP Section 998 offer in the amount of $100 plus a waiver of costs. Plaintiff argued that it was not a "good faith" settlement offer and that costs should not have been awarded. The trial court again ruled in favor of Century Surety and was affirmed on appeal.